The year 2013 was dominated by product off ensives at all of our divisions. Our innovative vehicles, pioneering technologies and efficient production processes set new standards in automobile manufacturing and strengthened
our position on international markets, thus laying the groundwork for
further growth.

Daimler’s share price gains 52 % over the year. Global stock markets developed very positively in
2013, supported by the expansive monetary policy of the central banks and the easing of the European
sovereign debt crisis. The Board of Management and the Supervisory Board propose an
increased dividend of €2.25 per share (prior year: €2.20). We off er investors and analysts a comprehensive
range of investor relations services. Daimler took advantage of the high level of liquidity
on international capital markets to refi nance its operations at attractive terms.

Our overriding corporate goal is to achieve sustained profitable growth and thus continually increase the value of the Group. We aim to attain the leading position in all of our business segments. To achieve that goal, we have defined four strategic growth areas for the Group. We will implement measures related to those areas in the coming years within the framework of the growth strategies of our divisions. These strategies will be accompanied by efficiency programs to ensure that our growth has a solid financial foundation.

Efficient Operation - Profitable Growth. Daimler is growing faster, on a broader front and in more markets than ever before. This growth is based on extensive product offensives in all our divisions. We are expanding our product range, creating new segments and specifically addressing regionally different customer requirements. And in doing all of this, one thing is crucial: We don’t want to grow at any price, but with sustainable profitability. That’s why the efficiency programs in the divisions are an additional key element of our growth strategy. Find out more in the section Efficiency & Growth of this Annual Report.

The year 2013 was very successful for Daimler overall. We significantly increased our unit sales and revenue, and continuously improved the profitability of our divisions as the year progressed. We thrilled our customers with numerous new products. And we set new standards with pioneering innovations, above all with regard to the safety and environmental compatibility of our vehicles. In the year 2014, we will continue our growth offensive and further enhance the efficiency of our processes.

2013 was another record year for Mercedes-Benz Cars. Unit sales, revenue and production reached all-time highs. As we anticipated at the beginning of 2013, EBIT displayed a clear upward trend as the year progressed. Our most important new model was the S-Class, a pioneer of automotive development that underscores our leadership in the luxury segment. Additional new models in 2013 were the new E-Class and the CLA compact coupe. We also unveiled the new GLA, a compact SUV. Targeted investment in our global production network and sustained improvements in efficiency have put us on track for further profitable growth.

Daimler Trucks. Daimler Trucks continued to forge ahead with its product offensive in 2013. The presentation of the new Mercedes-Benz Arocs and Atego models and of the Mercedes-Benz SLT, Econic and Unimog special trucks enabled Daimler Trucks to complete its Euro VI-compliant product range well before the stricter emissions standards came into effect at the beginning of 2014. The new product from Daimler Trucks North America, the Freightliner Cascadia Evolution, has met with an outstanding market response. The BharatBenz brand’s expanded product lineup is also setting new standards on India’s roads. The new “Asia Business Model,” an excellence initiative of the “Daimler Trucks #1” program, reached a milestone when production of FUSO models commenced in Chennai, India.

In 2013, Mercedes-Benz Vans launched the new Sprinter — the global vehicle in the van segment. With its new safety and assistance systems, the Sprinter sets new standards in its class. Our unit sales increased in 2013 and we achieved double-digit growth rates in China, Latin America and Eastern Europe. Despite sharp market declines in Western European, we were able to improve our earnings. We are continuing our “Vans goes global” growth strategy. By starting production of the Sprinter Classic in Russia and strengthening our activities in China, we have laid the foundations for continued growth.

Numerous new products and the systematic continuation of the “GLOBE 2013” growth and efficiency program contributed to the turnaround at Daimler Buses. Higher unit sales and further efficiency progress led to a significant earnings improvement in financial year 2013. The division thus confirmed its leadership in the core markets of Western Europe and Latin America. During the year under review, the division focused on converting the entire European product range to Euro VI-compliant exhaust-gas technology. Daimler Buses set new standards in the luxury coach segment with the presentation of the new Setra TopClass 500.

At Daimler Financial Services, the number of financed or leased cars and commercial vehicles passed the three-million mark for the first time ever. New business and contract volume reached new record levels. The division also set a new record for brokering automotive insurance policies. At the end of 2013, the car-sharing program car2go had almost 600,000 customers and was the market leader in its segment. Once again, customers and dealers alike gave the Daimler Group’s financial services division very high marks.

Daimler’s divisions generally performed well in an market environment that remained
difficult. We renewed our product range while continuing to increase our efficiency. We were able to improve our market position in many areas.

Daimler’s Board of Management and Supervisory Board are
committed to the principles of good corporate governance.
All of our activities are based on the principles of responsible,
transparent and sustainable management.

The Consolidated Financial Statements presented as follows have been prepared in
accordance with the International Financial Reporting Standards (IFRS). They also
comply with additional requirements set forth in Section 315a (1) of the German
Commercial Code (HGB).

Commitments upon termination of service

Retirement provision. The pension agreements of some Board of Management members include a commitment to an annual retirement pension, calculated as a proportion of the former base salary and depending on the number of years of service. Those pension rights were granted until 2005 and remain valid; they have been frozen at that level, however. Payments of these retirement pensions start upon request when the term of service ends at or after the age of 60, or are paid as disability pensions if the term of service ends before the age of 60 due to disability. The respective agreements provide for a 3.5% annual increase in benefits (with the exception that Wilfried Porth’s benefits are adjusted in accordance with applicable law). The agreements include a provision by which a spouse of a deceased Board of Management member is entitled to 60% of that member’s pension. That amount can increase by up to 30 percentage points depending on the number of dependent children.

Effective as of January 1, 2006, we replaced the pension agreements of the Board of Management members with a new arrangement, the so-called pension capital system. Under this system, each Board of Management member is credited with a capital component each year. This capital component comprises an amount equal to 15% of the sum of the Board of Management member’s fixed base salary and the actual annual bonus, multiplied by an age factor equivalent to a rate of return of 6% until 2015 and 5% as of 2016 (Wolfgang Bernhard and Wilfried Porth: 5% for all years). These contributions to pension plans are granted only until the age of 60. The benefit from the pension plan is payable to surviving Board of Management members upon retirement at or after the age of 60, or as a disability pension upon retirement before the age of 60 due to disability.

In 2012, Daimler introduced a new company retirement benefit plan for new entrants and new appointments for employees paid according to collective bargaining wage tariffs as well as for executives: the “Daimler Pensions Plan.” As before, the new retirement benefit system features the payment of annual contributions by Daimler, but is oriented towards the capital market, combined with Daimler’s commitment to guarantee the total of contributions paid. The Supervisory Board of Daimler AG has approved the application of this system for all newly appointed members of the Board of Management (so far, Hubertus Troska). Accordingly, each member of the Board of Management is credited with a capital component each year. This amount is calculated from 15% of the total of the base salary and the actual annual bonus. These contributions to retirement provision are granted until the age of 62. The benefit from the pension plan is payable to surviving Board of Management members upon retirement at or after the age of 62, or as a disability pension upon retirement before the age of 62 due to disability.

For the measurement of the total commitment, the targeted level of retirement provision – also according to the period of Board of Management membership – and the resulting annual and long-term expense for the Company are taken into consideration for each member of the Board of Management.

Payments under the pension capital system and the Daimler Pensions Plan can be made in three ways:

as a single amount;

in twelve annual installments, whereby interest accrues on each partial amount until it is paid out;

as a pension with an annual increment (see above Daimler Pension Plan pursuant to applicable law).

The contracts specify that if a Board of Management member passes away before retiring for reason of age, the spouse or dependent children is/are entitled to the full committed amount in the case of the pension capital system, and to the credit amount reached plus an imputed amount until the age of 62 in the case of the Daimler Pensions Plan. If a Board of Management member passes away after retiring for reason of age, in the case of payment of twelve annual installments, the heirs are entitled to the remaining present value. In the case of a pension with benefits for surviving dependents, the spouse/registered partner or dependent children is/are entitled to 60% of the discounted terminal value (pension capital), or the spouse/registered partner is entitled to 60% of the actual pension (Daimler Pensions Plan).

Departing Board of Management members with pension agreements modified as of the beginning of 2006 receive, for the period beginning after the end of the original service period and for the last time upon reaching the age of 60, payments in the amounts of the pension commitments granted as described in the previous section. Departing Board of Management members are also provided with a company car, in some case for a defined period. These payments are made until the age of 60, possibly reduced due to other sources of income, and are subject to annual percentage increases described above in the explanation of these pension agreements.

Service costs for pension obligations according to IFRS amounted to €2.5 million in 2013 (2012: €2.4 million). The present value of the total defined benefit obligation according to IFRS amounted to €70.1 million at December 31, 2013 (December 31, 2012: €81.7 million). Taking age and period of service into account, the individual entitlements, service costs and present values are shown in the table. (See table C.48)

Commitments upon early termination of service. In the case of early termination of a service contract without an important reason, Board of Management service contracts include commitments to payment of the base salary and provision of a company car until the end of the original service period at a maximum. Such persons are only entitled to payment of the performance-related component of remuneration pro rata for the period until they leave the Company. Entitlement to payment of the performance-related component of remuneration with a long-term incentive effect is defined by the conditions of the respective plans.

The total of the payments described above including fringe benefits is limited to double the annual remuneration and may not exceed the total remuneration for the remaining period of the service contract.

Sideline activities of Board of Management members. The members of the Board of Management should accept management board or supervisory board positions and/or any other administrative or honorary functions outside the Group only to a limited extent. Furthermore, they require the consent of the Supervisory Board before commencing any sideline activities. This ensures that neither the time required nor the remuneration paid for such activities leads to any conflict with the members’ duties to the Group. Insofar as such sideline activities are memberships of other statutory supervisory boards or comparable boards of business enterprises, they are disclosed in the notes to the annual company financial statements of Daimler AG and on our website. In general, Board of Management members have no right to separate remuneration for board positions held at other companies of the Group.

Loans to members of the Board of Management. In 2013, no advances or loans were made to members of the Board of Management of Daimler AG.

Payments made to former members of the Board of Management of Daimler AG and their survivors. Payments made in 2013 to former members of the Board of Management of Daimler AG and their survivors amounted to €14.6 million (2012: €15.4 million). Pension provisions for former members of the Board of Management and their survivors amounted to €217.0 million at December 31, 2013 (2012: €225.9 million).

C.48

Individual entitlements, service costs and present values for members of the Board of Management